Summary
Summary Removal of Director Essay Plan
- Module
- Company Law
- Institution
- Edge Hill University (EHU)
Removal of Director essay plan
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Removal of Directors – Essay PlanIntroduction
Procedure
Shareholder gives special notice to company
o 28 clear days’ notice
o Copy sent forthwith to director concerned
o Written representation by director sent to shareholders
Must not be defamatory
Can have legal representation
Directors call a general meeting – s302. If Directors refuse;
o Shareholders requisition directors to call meeting – s305
o Shareholders convene meeting
Shareholders pass an ordinary resolution to dismiss director at General
meeting
o Cannot be done by written resolution
o Director has right to speak at meeting before vote.
Can have legal representation
Protection from dismissal
Must be in place before procedure for dismissal initiated
Director and Shareholder
o Bushell v Faith Clause – multiplier to outvote other shareholders
, Can be removed by special resolution by the shareholders.
However, may also be a clause giving weighted votes to director
in this scenario.
o Shareholder Agreement – agreement between shareholders to not vote
to dismiss one another
Director
o Long service contract
Entitled to compensation/damages – normally what they would
have received if they remained in office
Can be very expensive
o Loan to company
May include a clause requiring full repayment immediately if
director is dismissed
Can be very expensive
Dismissal by board of directors
‘cecil king clause’
Clause which allows board to dismiss a director
Not included in Table A or Model Articles, must be inserted by special
resolution by the shareholders
Conclusion
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